Queries on lawyer's role in price-fixing

By BRIAN FALLOW

WELLINGTON - The Law Society will be looking into Commerce Commission concerns about an Auckland lawyer at the centre of a price-fixing case.

The commission said it had been unable to take the lawyer involved to court because of legal professional privilege.

The competition watchdog said the lawyer advised an importer on a contract with another company.

Under the contract the two companies agreed to minimum wholesale and retail prices.

Such agreements are prohibited by the price-fixing provisions of the Commerce Act.

The commission's manager for the Commerce Act, Geoff Thorn, said the name of the lawyer's firm was on the cover of the contract and the lawyer had acknowledged that he had provided advice on the contract.

But he had invoked legal professional privilege, which protects the confidentiality of dealings between lawyer and client, and had refused either to confirm or to deny whether he had given advice on the clause that made the contract price-fixing.

A letter from the commission to the lawyer warned him that if he did give advice on that clause, he was likely to have breached the act himself by aiding and abetting the breach.

"The only way you could not have breached the act is if you failed to consider clause 4.1 [of the contract]," said the commission's letter.

"If that is the case, your failure to consider and provide advice on that clause has led to your clients breaching the act."

The firms have acknowledged that the contract was price-fixing and have undertaken to modify it so that it complies with the act.

Mr Thorn said that without evidence to show the lawyer acted deliberately, rather than negligently, the commission would not release his name.

Nor would it say what industry the firms involved were in.

"That would make it too easy for people out there to identify who the lawyer is," he said.

"We can't identify a person under these circumstances because if we were going to do that we should have gone to court."

The executive director of the Auckland District Law Society, Margaret Wong, said the society would be in touch with the commission to find out more about the case.

As for disciplinary proceedings, "it depends how serious the matter is," Ms Wong said.

"Under the Law Practitioners Act, the society has authority to take disciplinary action in negligence matters which are serious enough to reflect on a person's fitness to practise.

"Otherwise, negligence matters are dealt with as they are in any other profession, as a matter of civil claim."

Mr Thorn said the Commerce Act had been around since 1986. Most businessmen and women knew that price-fixing was illegal, he said.

"You would therefore anticipate that at least a lawyer would know."